It would be wrong to assume that everybody in the City of London thinks Lord Turner has lost his marbles. Many, undoubtedly, agree with the mayor of London, Boris Johnson, that introducing taxes on certain financial transactions is "crackers". But, dig a little deeper and you will find people who think the chairman of the Financial Services Authority is on to something.

Turner did not say that modern investment banking is a racket, but others in the City do. The idea is not heresy. You will find the view expressed frequently (although usually in private) by senior fund managers, folk who used to be considered the core of the City club.

Many of these people are tired of seeing companies in which they invest pay exorbitant advisory and underwriting fees to investment banks. They think many derivative products have been invented solely as means to extract fees from unsuspecting clients. They conclude that the primary purpose of investment banks has become the advancement of the financial interests of the people who work in them.

So they know what Turner is talking about when he says the financial services industry has become swollen and that some of its activities are socially useless. They would probably share the view of Benjamin Friedman, the Harvard economics professor, who highlighted in yesterday's Financial Times the perverse waste of human capital in showering immense financial rewards on "those whose job is to ensure that microscopically small deviations from observable regularities in asset price relationships persist for only one millisecond instead of three".

Why are the sympathetic constituencies in the City, assuming they exist, silent? Many reasons. They haven't done badly themselves by the current set-up; they fear change; they don't want the UK to act in isolation; and they don't have easy solutions themselves.

Call that feeble-minded if you wish. But is it any more feeble than the response from government, which seems to want to close down discussion on Turner's thoughts before a debate has even begun?

Compare and contrast the contributions of the heads of the tripartite authorities. You might expect the politicians, the ones who have to fight an election next year, to be the free-thinkers. It's the other way around.

Turner, chairman of the chief City regulator, says that there has been "a very fundamental shock to the 'efficient market hypothesis' which has been in the DNA of the FSA and securities and banking regulators throughout the world". He says the adjustment cannot be minor. The governor of the Bank of England, with a sharper sense of style, was on a similar tack a few months ago when he said: "'My word is my CDO-squared' will never catch on."

Yet the Treasury, in response to Turner's thoughts, asserts in leaden fashion that governments, not regulators, impose taxes. Yes, that is true. But the debate is broader than that. It's about the future of the financial services industry. What do we want it to do?

These waters aren't as dangerous as the government seems to think. Of course it is true that the City doesn't want to lose its competitiveness, but there is acceptance in many quarters that change is necessary. Maybe the Treasury listened too hard to all those investment bankers it hired during the banking crisis. The truth is there is more to the City than one tribe – and there's a broader range of views out there.

Rail reversal

What a turnaround. A couple of months ago, it was odds-on that National Express would fall to the first decent bid that turned up. And, if the bidder was backed by the Cosmen family, owner of 18% of National Express, then the chances of survival looked very slim indeed. The company had walked away from its east coast mainline franchise, infuriating the transport secretary, Lord Adonis. The discredited chief executive, Richard Bowker, had run off to build a train set in the United Arab Emirates. Chairman John Devaney seemed to have been dealt a weak hand.

Now the bid has arrived and things look different. The Cosmens, plus their private equity friends from CVC, want to pay 450p. This is a big improvement on 350p, which appears to have been the opening gambit, but the effect on the share price yesterday was hardly electric. At 408p, the market is saying it doubts this deal will happen.

What's changed? Well investors have realised that, while warfare with the transport secretary is not helpful, National Express has some virtues. It makes profits and it generates cash. So re-capitalising the company via a rights issue, and finding a decent chief executive, is not a ridiculous strategy. The Cosmens may have to go somewhat higher if they really want to get their buses back.